Why do so few entrepreneurs manage to repeat their initial success? Take a moment to think of iconic serial entrepreneurs like Steve Jobs or Richard Branson, and you’ll notice something: they represent an exceptional minority. The truth is less than 1% of all entrepreneurs successfully start multiple companies. It’s a remarkable statistic. If these individuals were truly equipped with the perfect mix of skill, network, and reputation, why don’t they go on to repeat their entrepreneurial feats? The answer might surprise you. The crux of the matter is simple, though uncomfortable: luck plays a far more significant role than skill.

Why Serial Entrepreneurs Are So Rare

The entrepreneurial journey is one of uncertainty, risk, and unpredictable outcomes, yet it holds a certain allure. The prospect of creating something from nothing, of building an empire from scratch, is undeniably enticing. Yet, for all the stories of triumph, serial entrepreneurship—where an individual successfully starts multiple companies—is exceedingly rare. Out of all the entrepreneurs who launch businesses, less than 1% manage to replicate their success multiple times. This statistic reveals a profound truth about business: it’s not enough to be skilled, driven, and capable; a whole range of factors outside one’s control must align perfectly for repeated success.

Consider the cases of Steve Jobs, Richard Branson, and Elon Musk. These individuals are the paragons of serial entrepreneurship, having founded several highly successful ventures. But these examples are exceptions, not the rule. For most entrepreneurs, the challenges of starting and scaling a company once are formidable enough. Most entrepreneurs, even if they achieve initial success, often lose when trying to repeat that success. Why? The variables influencing success in entrepreneurship—such as market conditions, competition, timing, funding, and even luck—are far too complex to be neatly replicated.

This unpredictability explains why many entrepreneurs, after their first success, fail to launch subsequent successful ventures. The excitement and enthusiasm that fueled their initial journey fade as the realities of the business world sink in. Starting and scaling a new company is an endeavor full of uncertainty. For most, the prospect of tackling that challenge again—especially after a significant success—is a daunting one. Even those who do try to start another venture often find that the same strategies, skills, and tactics that worked in the past don’t necessarily work a second time. External factors, many out of the entrepreneur’s control, often tip the scales in favor of failure.

The Flaw in Believing Skill Is the Only Key to Success

The idea that success is solely the result of skill and hard work is pervasive and understandably so. We live in a world that values talent and effort. From an early age, we’re taught that we can achieve anything if we work hard enough and put in the necessary time. And while this is undoubtedly true in many aspects of life, business is a different beast altogether. In entrepreneurship, skill and hard work alone do not guarantee success. They are merely the necessary ingredients—important but not sufficient on their own.

At first, this may sound like a harsh truth. After all, many entrepreneurs have invested significant time and resources in perfecting their craft, honing their business acumen, and building their networks. It’s easy to see why the idea that “success is a matter of luck” can feel like a slap in the face. But a deeper look at the data reveals a startling reality: luck plays a much bigger role than we are willing to acknowledge.

The issue lies in the misunderstanding of what success truly depends on. Skill may be essential to get a business off the ground, but it is not the defining factor for long-term success. The more time you spend in the entrepreneurial world, the more you realize that outcomes often come down to timing, market forces, and external conditions far beyond anyone’s control. While a skilled entrepreneur can navigate obstacles more effectively, it’s ultimately about being in the right place at the right time, with the right product, at the right moment. Even the most talented entrepreneur can fall victim to these uncontrollable variables, and that’s where luck becomes the determining factor.

Talent Isn’t Enough: A Deeper Look at Long-Term Success

If skill were the ultimate determinant of success, we would expect successful entrepreneurs to continue building companies with similar levels of achievement throughout their careers. But this simply isn’t the case. Even after achieving one major success, most entrepreneurs fail to replicate that success in subsequent ventures. They might try, but their challenges are significantly more complex, and they often find themselves on the losing side of the equation.

This reveals the crucial difference between necessary and sufficient conditions for success. While talent is certainly necessary—it provides the foundation on which businesses are built—it is insufficient. Success in entrepreneurship is far more about a confluence of factors that cannot be predicted or controlled. Market conditions, access to funding, consumer demand, and sometimes pure coincidence play a massive role in whether a venture succeeds or fails. This is why many talented entrepreneurs find that the formula that worked once doesn’t work again despite all their hard work. The key factor isn’t skill; it’s luck.

This discrepancy between talent and long-term success suggests that entrepreneurship operates under different rules than other professions. Unlike fields such as law, medicine, or engineering, where skills can be consistently applied to produce predictable results, entrepreneurship is an arena with external forces that can make or break a business. These factors are unpredictable, often out of the entrepreneur’s hands, and can swing success in ways that skill alone cannot.

Corporate Leaders: The Myth of CEO Impact

In the business world, the CEO’s role is often mythologized. Corporate leaders are seen as the driving force behind a company’s success. The prevailing narrative is that a visionary leader with exceptional management skills, strategic brilliance, and deep industry knowledge is the key to unlocking growth and profitability. This belief is perpetuated in business books, motivational talks, and corporate culture, where CEOs are lauded as the architects of their companies’ destinies.

But the research paints a different picture. While strong CEOs may indeed lead successful companies, the difference between a “great” CEO and an “average” one is often not as pronounced as many would like to believe. Studies have shown that in 40% of cases, the weaker CEO leads the stronger company. This suggests that other factors—such as the market environment, company culture, and the competitive landscape—are far more significant in determining a company’s success than the CEO’s abilities.

This raises an important question: if CEOs aren’t as important as we think, then what is? The answer lies in the larger context within which the company operates. A CEO might have exceptional management skills, but if they are leading a company in a booming industry or with the perfect product at the perfect time, their leadership will seem more impactful than it is. Conversely, a less competent CEO might find themselves leading a company that benefits from favorable market conditions, and their company will thrive despite their shortcomings.

The myth of the CEO as the sole driver of success ignores that business outcomes are often shaped by factors far beyond any individual leader’s control. Market conditions, timing, and luck play a critical role, often overshadowing the CEO’s impact.

The Inaccuracy of Ranking Skill in Certain Fields

Certain industries, such as asset management, epitomize the illusion of skill. In fields where performance is highly variable, such as finance, the idea that skill directly correlates with consistent success is a fallacy. Daniel Kahneman, in his book Thinking, Fast and Slow, describes an experiment he conducted in asset management. Kahneman analyzed the performance of investment advisers over several years and found that the ranking of advisers from one year to the next was completely random. An adviser who performed well one year could easily be at the bottom of the list the next. There was no correlation between an adviser’s past performance and future success.

This randomness reveals a critical flaw in assessing success in certain industries: we often attribute success to skill when, in reality, it is more likely the result of chance. Asset managers, for example, may be rewarded with bonuses based on past performance, even though their results are no better than random. The firm rewards luck, not skill. This phenomenon is not unique to asset management but can be found in many other fields where outcomes are subject to unpredictable variables.

The lesson here is that skill can be overrated skill can be overrated in industries where chance p The apparent success of a high-ranking asset manager, for example, may have little to do with their actual skill and everything to do with the timing of their investments. Like many others, the financial industry suffers from the illusion of skill, where success is misattributed to expertise rather than to the forces of luck and chance.

The Limits of Skill in Entrepreneurship and Leadership

In plumbing, law, or medicine, skill is crucial. A plumber must know how to fix pipes; a doctor must know how to perform surgery. These fields rely on specific expertise that directly impacts the outcome. However, regarding entrepreneurship and leadership, the role of skill is less clear. While skills such as vision, strategy, and decision-making are important, they are not the sole determinants of success. The landscape in which these skills are applied is more unpredictable, and often, luck plays a pivotal role.

In entrepreneurship, the success of a business is often determined by external factors beyond the entrepreneur’s control. Timing, market conditions, consumer demand, and even the right connections can make all the difference. A talented entrepreneur might build a great product, but success may remain elusive if the market is not ready for it or the competition outpaces them. The same is true in leadership—while strong leaders can inspire their teams and drive strategic initiatives, the overall success of a company often depends on factors beyond the CEO’s influence.

The key takeaway is that while skill is necessary, it is not always the deciding factor in success. In entrepreneurship and leadership, luck, timing, and external conditions often weigh more heavily than skill alone.

The Final Word: Luck Over Skill

In business, especially in entrepreneurship and leadership, luck often has a more significant impact than skill. Talent, perseverance, and hard work are undoubtedly necessary to succeed, but they are insufficient. Many entrepreneurs and leaders find themselves at the mercy of forces outside their control, from market fluctuations to timing to pure chance.

In industries like plumbing or law, skill is essential and directly correlated with success. But in the unpredictable business world, luck’s role cannot be understated. Understanding this distinction is crucial for anyone looking to succeed in business. By acknowledging the role of luck, we can better navigate the complexities of entrepreneurship and leadership, recognizing that, sometimes, success isn’t just about skill—it’s about being in the right place at the right time.

Conclusion: Embracing the Role of Luck

In a world where skill is often worshipped, it’s hard to accept that luck plays a central role in our success. The entrepreneurial journey, in particular, is a battleground where talent may help you survive, but it won’t guarantee a win. Undoubtedly, skills, hard work, and perseverance are important, but they are not the defining factors. Sometimes, success is simply about being in the right place at the right time. So next time you think about an entrepreneur’s journey, remember: luck, more than skill, might make the difference. Perhaps it’s time to stop deifying the skills of business tycoons and start appreciating the role of chance in their journeys.

This article is part of The Art of Thinking Clearly Series based on Rolf Dobelli’s book.